Copper’s demand has grown globally, with the construction, electronics, and manufacturing industries making up a significant chunk. As the world’s largest consumer of copper, China’s economic performance has an outsized impact on global copper prices.
The start of the week saw the price of copper surge, with investors reacting positively to robust industrial output from China. Actively traded copper contracts on the Shanghai Futures Exchange saw prices hit $11,986.52, representing a 0.7% rise. On the London Metal Exchange, benchmark three-month copper prices climbed to $10,610 per metric ton, marking a 0.1% increase.
Figures from the National Bureau of Statistics show that in September, industrial output in China rose by 6.5%, as compared to the same period last year. This marks a significant improvement over the earlier 5% growth forecast, a welcome surprise that lifted market sentiment despite a slowdown in the East Asian country’s GDP in the third quarter.
Data shows that over the last year, China’s GDP expanded at the slowest rate of any quarter, easing from 5.2% growth recorded in the second quarter.
A commodity strategist at WisdomTree, Nitesh Shah, explains that production figures exceeding market expectations are a positive signal for base metals. With supply deficits in copper expected in the future, prices are expected to continue rising, with many analysts refining their outlooks on market supply and demand.
This follows a string of mining interruptions like the mudslide at the Grasberg copper and gold mine in Indonesia, which saw the death of 7 workers at the Central Papua operation. In response to the incident, Freeport-McMoRan temporarily halted operations at its Grasberg mine to focus on search efforts.
Earlier this year, the Kamoa-Kakula mine suspended its operations following seismic activity that saw increased water inflow levels into the underground mine.
Investors are also looking forward to U.S.-China trade negotiations as well as feedback from the Beijing plenum, where top officials in the Communist Party will discuss a strategic plan for the next five years.
This comes after U.S. Secretary of Treasury, Scott Bessent, revealed that he intends to meet Chinese Vice Premier He Lifeng in Malaysia to try to prevent the increase of American tariffs on Chinese goods.
In other news, lead and zinc saw their prices climb to $1,980 and $2,944, marking 0.5% and 0.4% increases respectively. Tin and Nickel saw their prices drop, hitting $34,900 and $15,100 respectively. Aluminum also recorded a 0.5% decrease in its price, reaching $2,765 per ton.
For firms like Torr Metals Inc. (TSX.V: TMET) with interests in the copper extraction value chain, the positive data from China fueling the red metal’s price is welcome news.
NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET
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